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1. Supply chain. "Global supply chain pressures decreased again in March, falling from .28 to 1.06 standard deviations below the index’s historical average."
2. Financial stress. "Indicators of financial stress continued to normalize over the past week. Despite this normalization, futures price a large Fed cutting cycle, with the first cut by September (top left) and a cumulative -200 bps in cuts priced through end-2024. Markets price deep US recession."
3. Credit crunch underway. "A survey of 71 banks in the Dallas Fed district done after SVB went under shows a dramatic reversal in loan volumes."
4. Delinquency rate. "Default rate on credit card loans from banks not in the top 100 has been a sharp rise. This occurred before the 2001, 2008 and 2020 recession."
5. GDP growth. "Our analysis suggests that additional tightening in lending standards will subtract roughly 0.5pp from 2023 GDP growth."
6. Job cuts. "Challenger, Gray & Christmas report announced a bigger than expected 89,703 job cuts in March (270,416 year-to-date), up 319.4% YoY."
7. Jobless claims (I). "Initial jobless claims soared to 228k - This is the 9th straight week with initial claims above 200k... post revision of course. Continuing claims surged above 1.8mm, its highest since Dec 2021."
8. Jobless claims (II). "Continuing claims are up 19% YoY. 20% is my trigger for a recession call."
9. Jobless claims (III). "The so-called 'adjustment' is shown below."
10. Jobless claims distortions. "Our series suggests both that seasonal adjustment distortions are currently depressing reported initial claims by 40-50k and that seasonal adjustment issues have masked a roughly 45k rise in initial claims since the start of the year."
11. Skilled vs. unskilled. "The recent strength in employment data has almost entirely been driven by unskilled jobs."
12. Search for yield. Google "search volume for terms like ‘yield,’ ‘Treasury Bill,’ and ‘Certificates of Deposit’ has surged to record high (since data started in 2004) ... search activity for ‘money market’ at highest since 2008."
13. Volatility reset. "Volatility across assets has reset, led by equity volatility."
14. AAII sentiment. "The AAII bull-bear spread has moved sharply higher. We are not at extremes yet, but such a move higher has usually meant the SPX takes a chill pill."
15. Active managers. The NAAIM exposure index moved up to 73 from 65 a week earlier.
16. Hedge funds vs. banks. "The long/short ratio is at very low levels."
17. Hedge funds vs. regional banks. "Hedge funds have reduced the long/short ratio in regional banks, but this actually still remains at higher levels than what we saw back in 2020."
18. Small vs. large caps. "The Ratio of US Small Caps to US Large Caps is nearing March 2020 levels, which was the lowest we've seen since February 2001."
19. Unattractive stocks. "The equity risk premium—the gap between the S&P 500’s earnings yield and that of 10-year Treasurys—sits around 1.59 percentage points, a low not seen since October 2007."
20. Midterm election years. "Every time the S&P 500 had a 20%+ decline or more in Midterm Election year, 1-year later the market rallied ~30% or more."
21. Net margins. "Profit margins are expected to contract to what are still historically elevated levels."
22. Sales vs. margins. "A deep contraction in margins will mostly outweigh modest growth in first-quarter sales."
23. Earnings path. "On average, earnings forecasts get revised lower."
24. Earnings estimates (I). "Heading into the year, analysts expected earnings *growth* for Q1. Now they're expecting almost a 6% decline for the quarter."
25. Earnings estimates (II). "Top-down strategist EPS estimates for 2023 haven't moved since banking concerns started. Bottom-up numbers moved down a bit. Both could still be too high."
26. Earnings estimates (III). "If consensus earnings estimates are credible (which is dubious), maybe the worst is over. The black line (current estimates) is right on top of the light blue line (average for all cycles). Look how straight that estimate line is! Analysts are good at extrapolating, it seems."
27. Earnings guidance (I). As of today, 106 S&P 500 companies have issued guidance. "The first quarter has seen the highest number of S&P 500 companies issuing negative EPS guidance  for a quarter since Q3 2019 (81)."
28. Earnings guidance (II). "Information Technology and Industrials sectors have the highest number of companies issuing negative EPS guidance for the first quarter at 27 and 16, respectively."
29. Earnings guidance (III). And finally, “the first quarter has also seen the lowest number of S&P 500 companies issuing positive EPS guidance  for a quarter since Q2 2020 (24).”
Have a great weekend!
So, everything looks fine?? :)